STEPS IN PLANNING

Planning is a process and therefore it embraces a number of steps to be taken. In planning various facts are collected and analyzed and best out of all is chosen and adopted.Following are the steps which should be followed in procedures of planning.

(1) Awareness of Opportunities

Strictly, this is not the part of the planning as it precedes the actual planning process. However, an awareness of opportunities in the environment is important to reveal the strength and weakness of the organization and understand the problems. Setting realistic objectives depends upon this awareness.

(2) Setting Objectives or Goals

The second step is to set objectives/goals for the whole organization as well as for each department. Objectives must be specific and clear. They specify the expected results and emphasis is placed. They give direction for planning.

(3) Developing Planning Premises

Premises are planning assumptions about the environment in which the plan is to be carried out. Thhus, it is a forecast of sales volume, production cost, product line, competition, availability of labor, wage structure, tax rates and political and social conditions. Thus, planning premises are vital to the success of planning as they supply pertinent facts and information relating to future.

(4) Determining Alternative Courses

The fourth step is to search and identify the alternative courses of action. However, all the alternatives cannot be considered for detail analysis. Hence, the planner must usually make a preliminary examination to discover the most fruitful possibilities.

(5) Evaluating Alternative Courses

After identifying alternative courses the next step it to evaluate their strong and weak points with reference to cost, risk, profitability, capital requirement,etc.Hence, for a best plan all the alternatives should be evaluate deeply.

(6) Selecting a Best Alternative

After evaluating the various alternatives, the most suitable alternative is selected keeping in mind the organizational goals/objectives. Occasionally, an evaluation may disclose that two or more are advisable. This is the real point of decision making.

(7) Formulating Derivative Plans

When a best alternative is selected a basic plan is formulated. After this various plans are derived for each department and segments of the organization to support the basic plan.

(8) Budgeting the Plans

After plans are set, the final step is to prepare budgets for each derivative plan. The overall budgets of the organization represent the sum total of income and expenses. If done well budgets become an important standard against which planning progress can be measured.